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Wednesday, August 27, 2008

South Korea Ranks 3rd Among OECD Countries in "Readiness for Globalization"

Ready for Globalization? Global Benchmark Report 2008 is the fourth in a series of reports giving the Danish Confederation of Industry's annual assessment of the development in the business environment and the performance of the individual OECD member countries. I must admit that I was somewhat surprised that South Korea, overall, ranked third among the countries studied. The report includes 84 international benchmarks and provides a picture of the strengths and weaknesses of the OECD countries in the global economy. On balance it is quite a laudable accomplishment for The Republic of Korea and a closer look at the report is quite revealing. The report compares the performances of 29 OECD countries and their business environments.

The comparison is based on 84 indicators divided into six main sections as indicated in the accompanying graphic (click to see a full-size version of the graphic). Across all of the benchmarks, South Korea had more top-3 rankings than all other countries, except for Switzerland and Iceland. This is shown in the second graphic to the left. One can read through the entire report to get a sense of where Korea ranked high and where it was low. It ranked high on measures of growth and development, but low, for example on labour productivity. Korea came out number one among the 29 countries in the benchmark of knowledge and competence, based on average rankings using 23 separate indicators. This is shown in the third accompanying graphic. As the report explains, The strengths of South Korea include a large share of youth completing a secondary degree, a large share of students in science and engineering and a high patent productivity. One interesting measure shows that South Korea led all OECD countries in the share of 25-34 year olds with an upper secondary education as of 2005. It ranked number three in the share of 25-34 year olds with a tertiary education.

And, it ranked second to the United States in terms of expenditure on educational institutions as a percentage of Gross Domestic Product. Notably, South Korea ranked in the bottom five in terms of Labor Regulations as of 2007. The assumption of the report being that a low degree of labor regulation helps business adapt to changes. Not surprisingly, it ranked at or near the top in measures of broadband and internet use. Finally, it is of interest to note that South Korea ranked last on the measure of "Cultural Openness" as shown in the final graphic below, and next-to-last on a measure of "Discrimination Towards Race, Gender, Etc." in 2007. There is much more in the full report, which can be downloaded as a pdf file using the link at the start of this post.